“It doesn’t reflect logic, it doesn’t reflect history and it doesn’t reflect the current macroeconomic environment,” he said.

“The circumstances for a sharp fall in house prices would have to be a sharp rise in interest rates – and we’re so far away from having a sharp rise in interest rates it’s almost comical to suggest it.”

He also said it would be wrong for anyone to draw comparisons with the US housing crash of 2007, because the US had much looser lending standards.

First National Real Estate chief executive Ray Ellis also dismissed claims of a bubble, suggesting that there is a lot more affordable housing that some believe.

Mr Ellis said prices have risen sharply in inner-city areas owing to limited supply, which has created an impression that housing is unaffordable everywhere. However, cheaper alternatives can be found in many suburbs and regions.

The comments follow a submission to the federal parliament conducted by Lindsay David and Philip Soos from LF Economics, in which they warned policymakers that a problematic housing bubble is now a "near-certainty".

“Investors perceive net yields as secondary to expected rises in capital prices, while first home buyers overleverage themselves to enter a bubble-inflated market,” the economists said in a submission to the inquiry into home ownership.

“Tax expenditures, combined with the ongoing deregulation of the banking and financial system, has transformed the housing market into a casino.”